Gold climbed $4.90 or 0.03% in New York yesterday and closed at $1,617.70/oz. Silver fell to $27.86 then rallied and finished with a gain of 0.39%.

Gold appears to in lock down mode this week with prices trapped in an unusually narrow 1% or $15 range between $1,603/oz and $1,618/oz.

Gold Spot $/oz Daily,20 days & 20 minutes - (Bloomberg)

Support is at $1,585/oz to $1,590/oz and at $1,570/oz. Resistance is at last week’s high of $1,628/oz.

Technically, the narrowing wedge pattern suggests that a close below or above these levels could lead to rapid and sharp moves down or up.

Gold was initially flat in Asia but took a dip and has remained weak in European trading.

XAU/GBP Exchange Rate Daily - (Bloomberg)

Gold is on track for its 2nd weekly gain – possibly due to concerns about the Chinese, US and global economy. Slowdowns in all major economies mean that it’s not really a question of if the central banks will employ fiscal stimulus packages, only when.

An indication of continuing demand, especially institutional, for gold was seen in the data from ETF Securities' which showed gold ETF holdings up a very large 216,000 ounces or 6.7 tons on Thursday.

Cash Out Of Gold And Send Kids To College?

The Financial Times published an interesting article on Wednesday by a Tokyo-based analyst with Arcus Research, Peter Tasker, entitled of 'Cash out of gold and send kids to college'.

The article is interesting as it is an articulate synopsis of those who are either negative on and or bearish on gold. It clearly shows the continuing failure to understand the importance of gold as a diversification and as financial insurance.

Tasker incorrectly states that gold is "just another financial asset, as vulnerable to the shifts of investor sentiment as an emerging market."

He conveniently ignores over 2,000 years of history showing how gold is a store of value. He also ignores recent academic research showing gold to be a hedging instrument and a safe haven asset.

Another fact unacknowledged is how gold has clearly been a store of value since the current financial and economic crisis began in 2007. Since then gold has protected people from depreciating financial assets (such as equities and noncore bonds) and from depreciating fiat currencies such as the dollar, the pound and more recently the euro.

Further evidence that gold is not just "another financial asset" is seen in the fact that some of the largest buyers of gold bullion bars today are central banks.

They are buying physical gold bullion in order to diversify their foreign exchange holdings and to own a physical hard asset that will protect in the event of currency crises or an international monetary crisis.

That gold remains a store of value is also seen in the fact that the other most important buyers of gold in the world are store of wealth buyers in Asia and the Middle East (particularly China and India but also in Turkey, Iran, Indonesia, Thailand, Malaysia, Vietnam etc).

Millions of these buyers do not view gold as a risky "financial asset." They know through experience that gold is a store of wealth and are buying near pure gold jewellery and bullion coins and bars in order to protect against currency debasement.

Were Peter to have a conversation with a few Spanish, Irish or Greek investors he would quickly realize why gold is not just another “risk on” asset.

Japanese, British and American investors would be wise to diversify into assets that have protected periphery European investors in recent months.

He also suggests that gold is a bubble as "the price has simply become too rich".

He makes a comparison with the "great historical bubbles", such as "Japanese stocks in the 1980s" and the "Nasdaq in the 1990s". This comparison is simplistic and misleading as the percentage price gains in both the Nikkei and Nasdaq bubbles was orders of magnitude greater than gold's gradual rise since in 2000.

Indeed if one looks at gold's performance in an all important long term perspective (see video showing ‘Gold Undervalued From Long Term Perspective’ <3 mins, 20 seconds>), one sees that gold's gains in recent years are very sustainable and gold is merely playing catch up after the massive under performance and bear market of the 1980's and 1990's.

The Financial Times is fairly good in covering the gold market and allowing a plurality of opinion regarding gold. Every so often simplistic, unbalanced articles about gold are published.

XAU/EUR Exchange Rate Daily - (Bloomberg)

Such articles by 'experts' have the effect of confusing and misleading other journalists and the wider public and contribute to weak hands selling their gold holdings. This was seen again in recent days.

What is interesting is that such articles are often a contrarian indicator. They often come at a time of heightened negative sentiment against gold and can often mark an intermediate low in the gold price.

These articles are also a good contrarian indicator as they show that there remains a fundamental lack of knowledge about and appreciation of gold and its importance as a diversification for portfolios.

Incidentally, in the volatile year that has been 2011, gold has still outperformed many assets and seen its wealth preservation attributes shine again.

Gold has risen by 8.7% in euro terms, by 3.1% in US dollar terms and by 2.3% in sterling terms so far in 2011.

Never let the facts get in the way of a good gold bashing article.

Tasker accepts that US equities, despite being in a 12 year bull market, are still not cheap and yet he does not advise people to cash out of US equities.

Not acknowledged is the fact that only a tiny minority of investors have any allocation to gold whatsoever and therefore are not in a position to “cash out of gold” even if they were imprudent to do so.

Finally, investors and savers who have an allocation to gold will, in the coming years, be the people who can as Tasker concludes "buy a nice house, hire some workers, send your kids to college and eat big breakfasts".

That is gold's value – it is a proven store of wealth that protects people's living standards from government profligacy and financial asset and currency depreciation.

I just received the alumni magazine for one of the hoity-toity graduate schools I attended. It made me a little bit queasy reading about all the various bs awards and honors the faculty bestows on each other. The amount and dollar value of some of the grants they received was also eye-opening. The whole thing is a scam--I felt it when I was there, and I still feel the same way, and that's why I'm not working in higher education.

Real estate also needs constant maintenance and upkeep costs. The only upkeep cost with gold is the cost of storing it, which can be as little as $75-100 a year for a safe deposit box. A house will cost at least $5000-10000 a year to maintain when property taxes and insurace are included.

get a grip.... Real Estate was an appreciating asset for one reason and one only , banks were perpetually loosening lending criteria for 40 years , pumping floods of fresh new fiat into housing , everyone jumped aboard like good little sheep thinking that buying a house on a credit card was the way to retire early and rich. now debt is collapsing , mortgages are unavailable , housing will revert to its true value, the value of its component parts, wood/brick/copper pipes. Gold on the other hand forms the base of Exters pyramid.... the layer above are US treasuries, once the fascination with lending money to banksrupt uncle Sam wanes there is only one place on earth for funds to go in size....GOLD ... hope this helps...

Partially true. Real estate has indeed been appreciating for decades due to, one: reduced credit-giving restraints by banks, second: increased money supply in the western world, and third and most important: The fact that you cannot make more land, but it's easy to make more humans, with associated human needs, ie. a place to live and work.

Mortgages and RE values are falling (not collapsing) due to the fact that the non-propertied wage workers are likewise falling into unemployment and outright poverty, with an inability to service their mortgage payments, simply because there is no money from work income to pay it.

As long as mainstream economics do not acknowledge this fundamental fact in resource scarcity of land, there will be a ever widening cleft between property owners and non-propertied wage workers, which NO amount of welfareist redistribution will solve.

I get mad when people say a "college" degree is what you need....that is to broad brushed for me.....if you study engineering...write code...medical... ...you will get a job.....if you study AFRICAN LESBIAN WRITERS....you will not get a job...to many people do the latter.....they pile up the government loans ..."study" for 8 years...Maybe go to GRAD school....because that is where the dreadlocks really look cool....they have no intention of paying the loans back...they believe that the government will come in and save them.....pay them off or forgive them..College is a right in their minds....also a job..healtcare..housing....it should all be supplied by government....see where this is going..

Work 2 jobs to pay for some pseudo educated acedemic's tenure. Fuck That. These people were supposed to be the educated conscience of the people and instead sold out for bankers confetti and a 2 hour workday.

To be clear--the professors didn't do that. They have their own foibles, but the people who sold out to the bankers are the administrators. Your typical college prof doesn't exactly live the high life. A handful work up to a decent salary. At the big research universities, there's a handful of high-flyers who pay themselves a percentage of each grant, but even then, they make like $250K/yr. before taxes and they work like hell. Contrast that with how much football and basketball coaches earn, or the higher ups at the university--that's where the priorities are all out of whack.

Eureka! I do believe you've just solved the woes of the world. Just round up all the unwashed unemployed, under-employed and benefit-leaching masses, send them to college and presto, they can all be gainfully employed AND pay off their degrees at the same time!

Well I agree, I am certainly not against education in most forms, and whether it's a trade skill or degree/diploma, all the better for the individual and the economy, in theory, to a degree. The comment that people can work to pay off their exhorbitant college fees while actually studying just struck me as a little ironic in this economic quagmire we are in, that's all!

Ahhh.... in short: "drop your financial safety, and pump money into the education bubble, and indebt your kids for life".

Well, yes, you are correct. However, you really can't expect the status quo shills to come right out and tell you what to do in a straightforward manner. For maximum effectiveness, it must be cloaked in marketingspeak and public relations puffery.

They will get a boatload of suckers to take the bait by extolling the virtues and necessity of a college education as an "investment in the future". Some of the suckers might get a little suspicious if the message was "throw away your savings and sell your children into slavery in exchange for accredited credentials which will have ceased to be relevant by the time they are awarded."

Hypocrite bullshitter right there folks, defends a tyranical govnerment that murders 3000 of its own citizens on 9/11 yet calls the author a shill for the status quo on gold and student debt. I can handle Robotrader and MDB, at least they're good for a laugh its the trolls like D&G that are the malicious, devious pieces of shit that need to be put up against a wall and shot in the coming revolution.

Have you toured many large campuses lately? I think it's clear that the bubble represents a lot of different things, especially tuition and real-estate, but overall, it is not wrong to portray it as a "higher education bubble" because when the bubble bursts, a lot of schools are simply going to cease to exist completely. The rest will be consierably downsized.

Critical thinking?,,,Critical thinking? Are you mad? You my friend should be inserted on the no fly list and renditioned under the NDAA,,, ASAP!!! Oh wait,,Obummer wouldn't go that far would he? You are a terrorist non the less. And you are now in grave danger...

I welcome articles like his at FT because one must see the absurdity of the position in order to bolster one's own. It's the ultimate form of hyperbole and exaggeration. It's almost as if the article were planted by the gold-bugs! How better to illustrate the sanity of holding gold than to wrap it in buffoonery?

I couldn't agree more and have to add, why would anyone want people entering and crowding the market that is soooo very underpriced?

The CB's have to continue expanding the monetary supply. Someone will buy or take that paper- until they don't.

Thusly, please continue to keep a lid on the price US government, please hold that short position JPM. Someday, I will need capital for the black markets which will control goods in the marketplace and they won't be taking dollars. As more and more goods are only secured on black markets, the dollar will cease to have any value.

Sell the gold and send the kids to college? For what? To burden them with debt and without a guarantee for a decent paying job? Spare me. Had parents invested in $30000 of gold in 2000, that gold would be worth around $180,000 today or the value of a decent house for which a college graduate would have to work a lifetime to pay off.

With a fully paid off house plus whatever savings a young person could save from age 18 to 25, they could end up going to college at a slightly more mature stage of their life and still have a family.

"Sell the gold and send the kids to college? For what? To burden them with debt and without a guarantee for a decent paying job? Spare me. Had parents invested in $30000 of gold in 2000, that gold would be worth around $180,000 today or the value of a decent house for which a college graduate would have to work a lifetime to pay off."

This is tripe. One could use that same argument for any bull market of any asset. Why didn't you invest in corn last year, you would have had great returns that would fit the statement above. What about all those RE investers before housing collapsed? They were saying and thinking the same thing. And what about this sentence? "To burden them with debt and without a guarantee for a decent paying job?". Where on earth is anything guaranteed? I don't know you economic or political values, but anyone that thinks something should be guaranteed in life is full of liberal BS with or without knowing it. Nothing is guaranteed in life including gold and life itself.

I don't think you people appreciate intellectual pursuits very much. You don't go to college because of "jobs" you go there because you want to learn about particular subjects. The whole vocational aspect is really a side issue. So what are you clinging to gold for if you don't have any better understanding of the world than when you started? Also, how do expect to obtain that gold unless you have something worthwhile to trade for? I guess you can be a whore and just take it up the ass, but that's not exactly contributing to mankind's knowledge. You get out of college what you put into it and far too many people put nothing into it and so they get nothing back out except debt. They're stupid to do that, they didn't think it through. But it isn't my problem.

I don't think you people appreciate intellectual pursuits very much. You don't go to college because of "jobs" you go there because you want to learn about particular subjects.

That's why some people go to college. If all you want to do is learn about particular subjects, college may help some, but it isn't necessary.

The whole vocational aspect is really a side issue.

You're somewhat correct, but not in the way that you expected. For most American college students these days, the vocational aspect is secondary to the primary reason they are attending college: credential attainment. It's just a way to spend four or five years drinking, getting high, having sex, and playing video games, interspersed with cramming for tests and navigating a maze of bureaucratic red tape.

It's nice to think that they're being educated along the way, and a few of them are, but for many, intellectual pursuits are tertiary at best.

Gold, silver are coming out of one of the bull run triangle corrections. As long as USA debt increases exponentially , which is guaranteed, there is nothing to stop the exponential trend of the 2001->onwards bull run. Absolutely nothing, so, as many times during this run, it will just move one back into exponetial corridor, and it will happen very, very soon. Silver will further benefit from downwards oscillation of GSR, and will grow superexponetially which will cause for it to correct first at 60-70 USD in february-April 2013.

After doing a thorough analysis using OHLC charts overlaying Elliott wave principle, Fabonacci ratios, momentum rate, the 200 and 50 DMA, and resistance break out trending I have come to the conclusion that the in-depth analyses just preformed is for SHIT because the market is counterfeit!

"As long as USA debt increases exponentially , which is guaranteed, there is nothing to stop the exponential trend of the 2001->onwards bull run. Absolutely nothing, so, as many times during this run, it will just move one back into exponetial corridor, and it will happen very, very soon."

Just tired of the "you should only go to school to be a cog" meme...people who think that their personal values should be projected onto the rest of society (if I don't like it, it's "useless shit") are no better than communists and they completely fail to understand what makes capitalism a better (not perfect, just better) system for satisfying our invididual needs, whatever they may be. Since I know Beetle is a 2/20 hustler, he gets zero slack when trying to pull rank on people who do the stuff that makes life worth living in a world full of paper-pushing pussies like him.

Agreed 100% and just to further this for people that might be a bit slow on the uptake, if you work 8 hours a day, and sleep 8 hours a day, that still leaves 8 hours of time to fill. What to do with that time? Even if you're completely fucked in the head and think it's normal to work 12 hours a day, that's still 4 hours, every single solitary day, of time that has nothing to do with working at a job. Consider an even more extreme scenario, where you work 12 hours, sleep 8 hours, and do chores 3 hours. Yep, there's still that pesky hour with nothing in particular to do. What to do with that time? Certainly not interact with your family, that's hippie bullshit. Prostitutes and blow? Don't need college do do those professions. Eat $500 a plate dinners? Cooked and served by liberal arts degreed people. Sorry for your inconvenience, Beetle, but we liberal arts "dipshits" unfortunately play at least some role in your illusiary "master of the universe" lifestyle.

This is what I was thinking, or at least my children, and it won't be taxed either. I don't have a lot, I think "all in" anything is dumb, but it's an asset that won't be taken or taxed when I'm gone. I don't believe I'll need it for what's left in my lifetime, but it's a good feeling knowing I won't be leaving a burden to my children when I go in the ground.

I post the following while acknowledging that I hold some PMs in my portfolio, physical.

"Tasker incorrectly states that gold is "just another financial asset, as vulnerable to the shifts of investor sentiment as an emerging market."

This is purely opinion, not fact.

"He conveniently ignores over 2,000 years of history showing how gold is a store of value."

This is true, gold has not historically gone to zero as other investments have such as a particular stock.

"Another fact unacknowledged is how gold has clearly been a store of value since the current financial and economic crisis began in 2007."

Several investments or sectors have risen in that time period. Why isn't the same logic used there? The truth is that many of those bull markets are liquidity driven and PMs are subject to those same rules of the market. It is unfortunate to have goldbugs like goldcore try to ignore supply and demand fundamentals to justify a certain opinion. The basis for goldcore's entire argument is a hedge against fiat currencies gone bad. Well until goldcore or someone else can tell us all definitively when the the world's reserve currency, the US Dollar, will be defunct, such arguments and statements made are pure speculation and often wrong because the analysis is so blatantly biased.

"Further evidence that gold is not just "another financial asset" is seen in the fact that some of the largest buyers of gold bullion bars today are central banks."

Central banks and governments have always held, bought and sold gold. Various transfers have risen and gotten more publicity. Again, the manipulation of information to justify a bullish argument.

I do find value in hold some PMs, but I think goldcore's nonsense post, arguments and logic do more harm then good. Finally I will add one more thing. Goldcore doesn't seem to see one important thing regarding the thread topic: "Selling gold to pay for kids college". Why is that? Why aren't those people using gold to pay for college instead of having to convert it to a fiat currency first? Because for some reason, goldcore hasn't accepted that fiat currency is still the preferred and accepted asset to pay for debts, not gold, not yet. This is my basis for suggesting that PMs will may decline relative to the US dollar in a deflationary environment. PMs may rise in value relative to other assets, but until the dollar is killed, people will have to convert ALL assets to dollars to pay for things, including gold.

"This is true, gold has not historically gone to zero as other investments have such as a particular stock."

What the hell kind of glue are you sniffing? "has not historically gone to zero"??? It is IMPOSSIBLE for gold to hit zero.

You know how gold is made? It is the result of a fusion reaction at the primal core of the Sun BEFORE our solar system took proper form. In other words, it was formed roughly 4 billion years ago when the Earth took form. You will never see that kind of raw fusion power again. EVER. Unless we get off this planet and start space exploring. That ain't happening any time soon.

Now -- not only is gold a store of value but it has insane numbers of industrial, technological and scientific uses. The same goes for Silver.

"You know how gold is made? It is the result of a fusion reaction at the primal core of the Sun BEFORE our solar system took proper form. In other words, it was formed roughly 4 billion years ago when the Earth took form."

Apart from a few simple errors in this statement, the same applies to every other element in the universe other than Hydrogen, Helium, Lithium and Beryllium.

You conveniently ignore the effect of manipulation by bullion banks and governments in the price of gold and silver. First, the question of why manipulate it in the first place: to protect the price of currency. Second, to manage the perception of gold and silver as assets by the general public. This has a definite effect on the market demand for PM's.

Goldcore is merely making a counter argument to Tasker's. It doesn't attempt to measure all assets classes, as Tasker doesn't. Tasker's argument is against gold.

I agree that currency is the preferred method, but that just might be because it is the ONLY LEGAL METHOD. Did you forget about legal tender laws?

Finally, pricng or attempting to determine value in a fiat currency is only useful if you're going to buy or sell. If you hold wealth, the price of a dollar is meaningless- unless you hold dollar denominated assets.

It's fiat price is arbitrary. That's the important distinction. It's actual value is not, both as a undilutable medium of exchange, and as an industrial metal. If that makes me a "goldbug", fine, but keep in mind that using that term is either wittingly or unwittingly advancing underlying motives.

"Once you label me, you negate me." Why are you negating people that hold the opinion that it's a good idea to hold gold as a store of value? What (or whose) purpose are you serving? I'm just a person trying to do what I can to protect my family. Why don't you want me to protect my family?

Gold's value is PRECISELY arbitrary. It is a rare element, and that's *all* it is. There are other rare elements as well, and any one of them can potentially be used as a form of "wealth preservation" or "sound money."

That's the first critical realization of the Austrian school of economics: ALL valulations are based on human psychology. There's no external source of information about what make something "valuable."

My purpose is to point out failures in *reasoning.* I don't particularly care what anyone does based on anything I say.

If there is no link between human consciousness and the perceived value of precious metals as measured against that human consciousness rather than as against fiat, then Tasker's thesis would be correct, no? However, if you agree with that assessment (gold consciousness link) then you are subject to Gensler's most recent naked Libor treatise and how his continuing move towards near frictionless money (electronic rather than paper money) leads to a reverse of Gresham's law. Unfortunately for FOFOA the prisoner's dilemma doesn't work as a single player game theory. As a matter of fact, game theory only works with two people and the same can be said of conspiracies.

Raise your hand if you would be willing to go to jail for not using your assigned electronic money to satisfy your double coincidence of needs. Not sure how to answer. Then ask Fekete or Jaitly. I don't think you will get an answer because if you did they (and their sponsors) would be out of business. Freegold is free alright in the same way you can imprison a man but you can't imprison his mind. Who needs habeas corpus when you have habeas mentis? Time for SecTreas to re-write the Magna Carta. Confidence in the U.S. dollar... a Guantanimo of confidence for the mind and a feedback loop of distraint for the Fed.

You enjoyed common prosperity under unperfect fiat currencies, accumulated some reserves and now when times are tough you prefer not to be part of the common? Its natural, do buy some gold.. if it will make you feel better. Whole idea (of gold as a savior) is retarded and most people will not profit on this bubble of desperation. As usual.

I hear you, sir. My kids are still young, but I've been saving Aurum and Argentum for my kids so when we come of age and understand finances, they'll be surprised with their very own literal treasure chest of shiny booty.

Suck it in, work hard, pay the kid's college and teach him/her the importance of being debt-free. Worked for us. Very appreciative daughter who is free to work for herself instead of a corporate master.

I started buying PMs while she was in college. Gave bullion rounds to niece and nephew for birthdays/Christmas/graduation. Nice to see gifts appreciate so much for them. Could have bought some itoy or edoodad, but don't think it would have worked out so well after a period of time.